Guatemala: Investing

FDI in Figures

The end of the civil war, the measures to liberate the economy and later, the implementation of the free-trade agreement ALCA, have allowed a rapid development of foreign investment inflows into Guatemala.  The global economic crisis, however, provoked a decrease of FDI in 2009, and they are beginning to restart slowly again.  Many hindrances to FDI persist:  Security problems, lack of high-skilled manpower, low quality infrastructures, the frailty of its legal institutions, administrative burdens.

Why You Should Choose to Invest in Guatemala

Strong Points

The Guatemalan market is very competitive. The country benefits of a very advantageous position due to its proximity to Mexico and the United States on one side and to the rest of Central America on the other side. The customs union established among the Central American countries and North America facilitates the passage and trade of goods. Currently, FDI accounts for 17.4% of GDP. The latest executive laws that came into force have accelerated the progress of privatization and instigated the end of monopolies. In this regard, a number of private investments will be able to get established in the next following years. The preferential sectors are the food industry, telecommunications, tourism and consumer goods.

Weak Points

Guatemala has the usual problems of the so-called "developing" countries. Corruption and the weakness of the intellectual property protection system are the two most significant loopholes. Additionally, the slowness and complexity of the administrative and bureaucratic procedures are sometimes discouraging. The lack of security and the social inequalities can be a hindrance to the development of a company as well as the decaying condition of roads and  the communication networks in certain geographical areas.

Government Measures to Motivate or Restrict FDI

Since 2004, the country has been making substantial efforts to promote foreign investment, facilitating the administrative procedures and establishing central information networks required for all foreign investors. Corruption and violence are denounced and handled by the state. The application and the success of these objectives are taking their time but Guatemala is clearly beginning a process of opening up economically and commercially. A proof of this is the number of trade treaties and agreements that have taken place in the past recent years. It is also important to remark that Guatemala is part of  the  MIGA: Multilateral Investment Guarantee Agency, a branch of the World Bank in charge of promoting and protecting foreign investment. It has also been ratified by the OPIC: Overseas Private Investment Corporation. Guatemala's membership to these type of organizations shows its determination to create a safe and attractive environment to foreign investors.

Procedures Relative to Foreign Investment

Freedom of Establishment

The freedom of the investor to set up is complete, there are even incentives to attract them. With regard to regional incentives, production or assembly operations using machines or imported components are highly encouraged.  These products have to be exported outside the Central American zone.  Companies established in free trade zones are exempt of all taxes and custom duties (except for social security contributions).  For more information refer to the Investments Promotion Agency and the Guatemalan Development Foundation .

Acquisition of Holdings

A majority holding interest of stock in a local company is legal in Guatemala.  There is however restrictions regarding certain sectors like the press, aviation, the navy for obvious security and independance reasons.

Obligation to Declare

The country's Foreign investments promotion agency enables one to get information on the necessary authorizations for establishment.  See also INVEST IN GUATEMALA.

Competent Organization For the Declaration

Company Register (Spanish only)

Requests For Specific Authorizations

None

Investment Opportunities

Investment Aid Agency

E-regulation in Guatemala

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Guatemala
Inter-American Development Bank, Tenders in South America
Globaltenders, Tenders & Projects from Guatemala
DgMarket, Tenders Worldwide

Other Useful Resources

E-regulations Guatemala

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